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February 2018

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The Trans-Pacific Partnership (TPP) agreement is not just positive for the Vietnamese economy, but also has its negatives; delegates heard at a seminar in Hanoi.

As per the TPP, 90 percent of Vietnamese exports to countries in the TPP will not attract tariffs, which provides attractive opportunities to Vietnamese industry, the Voice of Vietnam reported.

However, it will also open the doors to foreign competition in the Vietnamese domestic market and will put immense pressure on domestic industry as exports to Vietnam from TPP member countries too will attract zero tariffs, experts said.

Export of garments, footwear, timber and agricultural products will be the most benefitted and exports from other sectors which are weak today, will also be benefitted when exporting to other TPP members.

Vietnamese garments exported to the US currently attract tariffs ranging from 17% to 32% and once the TPP takes effects these exports will attract zero tariffs, which could mean exponential growth for the sector.

However, to enjoy benefits of reduced tariffs, the garment sector must comply with strict requirements on certificate of origin. Materials for garment production must be imported from other TPP member countries or produced domestically.

The 12 TPP member countries currently account for nearly 40% of the world’s population, produce over 50% of global GDP, and include some of the fastest growing economies in the world.